Nifty tops 17300, Sensex surges 1100 pts, here’s what is fuelling the rally; should you buy or sell?

Bulls charged back on Dalal Street on the week’s last trading day amid strong global cues. Benchmark indices edged higher in intra-day trade, jumping over 1.5 per cent as positive sentiments from the US, and Asian markets spilled over to domestic equities. Easing crude oil prices also fuelled the rally. Benchmark NSE Nifty 50 surged over 300 points to trade above 17,300 levels, and BSE Sensex climbed over 11,000 points. India VIX, the volatility gauge, meanwhile, slipped over 10 per cent. All sectors were trading firmly in positive territory with Nifty Bank and Nifty IT indices leading the front. 

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“In contrast to expectations of 8.1, the U.S. consumer prices index (CPI) report from yesterday showed a growth of 8.2% annually, fueling betting for significant rate hikes. However, the market is now attempting to discount the possibility that inflation may have peaked soon. Because of this, markets are celebrating the data even though inflation figures are higher than expected. On the domestic front, wholesale price-based inflation fell to 10.7% in September for the fourth consecutive month as a result of a decrease in the cost of food, fuel, and manufactured goods, which is also strengthening investor confidence,” said Rahul Goud, Research Analyst – Equity Research, CapitalVia Research.

“We urge investors to buy equities at the current time on any dips in the 16800 regions. Investors can acquire high-quality equities in the capital goods and infrastructure sectors right now since there are hints of significant industry capex,” Goud added.

Short-term market volatility to continue, buy quality stocks at reasonable price

“The Indian markets are following their global counterparts, which were significantly driven by short covering and also helped by market noise about lower terminal rate expectations from ECB and noise about the UK reversing the planned tax cuts. We expect short-term market volatility to continue, and thus, we advise investors to stick to investing in good quality companies available at a reasonable price,” Naveen Kulkarni, Chief Investment Officer, Axis Securities PMS.

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Look for buying opportunities at dips; IT, chemical stocks amid top suggestions

“Indian equity market benchmark indices Sensex & Nifty are up around 2% in today’s trading session thanks to a sharp short-covering rally in the US market post CPI numbers. Our markets were also oversold as FII’s net short position in the index future was 81% and PCR was 0.71. Call writers at a 17000 strike price are on the back foot after a gap-up opening therefore we are getting the support of short covering. The results of Infosys and Mind-tree were better than expected, which is also supporting the market,” said Pravesh Gour, Senior Technical Analyst, Swastika Investmart Ltd.

“The overall outlook of our market is bullish as Nifty is respecting its 200-DMA beautifully. “Investors are advised to look for buying opportunities at every dip. Domestic economy-facing stocks may continue to do well while selective buying in IT, Chemical and Pharma names can be done,” he added.

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